Celcuity(CELC) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Presents the unaudited financial statements and management's analysis for the first quarter of 2022, along with market risk and control disclosures Financial Statements (unaudited) Celcuity Inc. reported no revenue and an increased net loss of $7.9 million for Q1 2022, driven by higher R&D expenses, with cash and equivalents decreasing to $78.3 million Condensed Balance Sheets Total assets decreased to $79.9 million from $85.9 million at year-end 2021, primarily due to reduced cash, while liabilities increased and equity decreased Condensed Balance Sheet Data (unaudited) | Account | March 31, 2022 ($) | December 31, 2021 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 78,295,426 | 84,286,381 | | Total current assets | 79,443,854 | 85,351,975 | | Total Assets | 79,929,855 | 85,906,320 | | Liabilities & Equity | | | | Total current liabilities | 3,550,810 | 2,505,700 | | Total Liabilities | 18,390,140 | 17,195,843 | | Total Stockholders' Equity | 61,539,715 | 68,710,477 | | Total Liabilities and Stockholders' Equity | 79,929,855 | 85,906,320 | Condensed Statements of Operations Net loss significantly increased to $7.9 million from $2.8 million in Q1 2021, primarily due to a 199% rise in research and development expenses Statement of Operations Highlights (unaudited) | Metric | Three Months Ended March 31, 2022 ($) | Three Months Ended March 31, 2021 ($) | | :--- | :--- | :--- | | Research and development | 6,696,313 | 2,236,342 | | General and administrative | 811,292 | 555,428 | | Total operating expenses | 7,507,605 | 2,791,770 | | Loss from operations | (7,507,605) | (2,791,770) | | Net loss | (7,934,447) | (2,791,668) | | Net loss per share, basic and diluted | (0.53) | (0.25) | Condensed Statements of Cash Flows Net cash used in operating activities increased to $5.9 million in Q1 2022, leading to a $6.0 million net decrease in cash and cash equivalents for the quarter Cash Flow Summary (unaudited) | Activity | Three Months Ended March 31, 2022 ($) | Three Months Ended March 31, 2021 ($) | | :--- | :--- | :--- | | Net cash used for operating activities | (5,933,032) | (2,521,505) | | Net cash used for investing activities | (11,635) | (30,425) | | Net cash (used for) provided by financing activities | (46,288) | 25,850,921 | | Net change in cash and cash equivalents | (5,990,955) | 23,298,991 | Notes to Unaudited Condensed Financial Statements Key disclosures include the Pfizer license for gedatolisib with $335 million in potential milestones, a $25 million Innovatus loan, and a subsequent $100 million financing agreement - The company is a clinical-stage biotechnology firm focused on its lead therapeutic candidate, gedatolisib, and its CELsignia companion diagnostic platform, having generated no revenue to date[23] - In April 2021, the company entered into a license agreement with Pfizer to develop and commercialize gedatolisib, with potential development and commercial milestone payments up to $335.0 million[66][67] - In April 2021, the company secured a loan agreement with Innovatus for up to $25 million in three tranches, with the first $15.0 million tranche funded[59] - On May 15, 2022, the company entered into a securities purchase agreement to sell stock and warrants for an aggregate of $100 million, with the closing conditioned on the first patient being dosed in the VIKTORIA-1 Phase 3 clinical study[69] Management's Discussion and Analysis (MD&A) Management discusses the strategy for gedatolisib and CELsignia, increased operating expenses, and the sufficiency of capital to fund operations for at least the next twelve months Overview Celcuity is a clinical-stage biotech company developing gedatolisib for breast cancer and its CELsignia diagnostic platform, with a Phase 3 trial planned for mid-2022 - The company's lead therapeutic candidate is gedatolisib, a pan-PI3K/mTOR inhibitor for treating HR+/HER2- advanced breast cancer[72][73] - The company plans to initiate the VIKTORIA-1 Phase 3 clinical trial in mid-2022 to evaluate gedatolisib[82] - The proprietary CELsignia diagnostic platform uses live patient tumor cells to identify patients likely to respond to specific targeted therapies[84] Results of Operations The net loss increased to $7.9 million in Q1 2022, primarily due to a 199% increase in R&D expenses for gedatolisib development and VIKTORIA-1 trial initiation Comparison of Operating Results (Q1 2022 vs. Q1 2021) | Item | Q1 2022 ($) | Q1 2021 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | 6,696,313 | 2,236,342 | 4,459,971 | 199% | | General and administrative | 811,292 | 555,428 | 255,864 | 46% | | Total operating expenses | 7,507,605 | 2,791,770 | 4,715,835 | 169% | | Net loss | (7,934,447) | (2,791,668) | (5,142,779) | 184% | - The $4.5 million increase in R&D expenses was primarily driven by costs for existing clinical trials and activities supporting the initiation of the VIKTORIA-1 pivotal trial for gedatolisib[104] Liquidity and Capital Resources As of March 31, 2022, cash and equivalents were $78.3 million, with a subsequent $100 million financing agreement expected to fund operations for at least the next twelve months - As of March 31, 2022, cash and cash equivalents were approximately $78.3 million[115] - In May 2022, the company entered into a securities purchase agreement for $100 million, with funding contingent on the first patient being dosed in the VIKTORIA-1 Phase 3 study[112][113] - The company believes its current cash on hand will be sufficient to finance operations for at least the next twelve months[117] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Celcuity is not required to provide disclosure for this item - The company is a smaller reporting company and is not required to provide this disclosure[134] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2022[135] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[136] PART II. OTHER INFORMATION Covers legal proceedings, significant risk factors, equity sales, defaults, and other required disclosures Legal Proceedings The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business or financial condition - The company is not currently a party to any material legal proceedings[137] Risk Factors Key risks include dependence on gedatolisib development and regulatory approval, reliance on the Pfizer license, challenges for the CELsignia platform, and potential COVID-19 pandemic impacts - The company's future success is heavily dependent on its initial drug product, gedatolisib; failure to complete clinical development, obtain regulatory approval, or commercialize it would materially harm the business[139][152] - The company depends on an intellectual property license from Pfizer for gedatolisib; termination of this license could result in the loss of significant rights and materially harm the business[139][182] - The CELsignia diagnostic platform faces risks including finding pharmaceutical partners, lengthy and complex development, uncertain clinical trial outcomes, and potential future FDA regulation of Laboratory Developed Tests (LDTs)[214][216][219][257] - The COVID-19 pandemic may materially and adversely impact the business, including causing delays in enrolling patients in clinical trials[139][147] Unregistered Sales of Equity Securities and Use of Proceeds Net proceeds from the 2017 IPO have been fully utilized, and no unregistered sales of equity securities occurred during the reported period - The net proceeds of approximately $23.3 million from the September 2017 IPO have been fully utilized as of March 31, 2022[322][323] - There were no unregistered sales of equity securities during the reported period[324] Defaults Upon Senior Securities The company reports that there have been no defaults upon senior securities - None[324] Mine Safety Disclosures This item is not applicable to the company - None[325] Other Information The company reports no other information for this item - None[326] Exhibits This section provides an index of all exhibits filed with the quarterly report, including key corporate and financial agreements - The exhibit index lists key agreements including the Loan and Security Agreement with Innovatus, the Equity Grant Agreement with Pfizer, and the Open Market Sale Agreement with Jefferies[328]